Richard Goyder

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THE NEWS WRAP: Australia signs trade agreement with Japan

4:34PM | Monday, 7 April

Prime Minister Tony Abbott and Japanese Prime Minister Shinzo Abe have struck a bilateral trade agreement that will see tariffs cut on Australian agricultural exports.   Under the agreement, Japan’s tariff on Australian beef will be cut from 38.5% to 19.5% and the duty-free quota for cheese will increase from 27,000 tonnes per year to 47,000.   Exporters of fruit, vegetables, seafood, sugar and wine will also benefit from the agreement, although tariffs will remain on Australian rice exports to Japan.   In return, Australian tariffs on consumer electronics and whitegoods will be lowered, while Japanese-made cars will be $1500 cheaper, on average, under the agreement.   “This is the first time that Japan has negotiated a comprehensive economic partnership agreement or free trade agreement with a major economy, particularly a major economy with a strong agricultural sector,” Abbott said.   Another seasonally adjusted boost to job ads   There was a seasonally adjusted 1.4% increase in job ads during March, on top of a sharp 4.7% rise in February, according to the latest ANZ job ads series.   The survey marks the fifth consecutive increase in job ads, which are seen as a good indicator of future movement in unemployment figures.   “The trajectory of the pick-up in job advertising will be important for gauging the timing and pace of future interest rate rises,” ANZ's Australian chief economist Ivan Colhoun said. “ANZ continues to expect the cash rate will remain unchanged in 2014 and increase modestly by 1 percentage point to 3.5% over 2015.”   Wesfarmers sells insurance business   The parent company of supermarket giant Coles, Wesfarmers, has announced the $3 billion sale of its insurance business to global broking group Arthur J. Gallagher, following the sale of its insurance underwriting business in December.   The company expects profits from the deal of between $310 million and $335 million, increasing the total profits from its insurance sell-off to over $1 billion.   “It will either reduce debt or [we will] find a way of returning the proceeds to shareholders, or we'll find an investment. We're always looking at opportunities to invest, and we've got a track record of being very disciplined,” chief executive Richard Goyder said.   “We're not going to sit on an undergeared balance sheet for too long either … we've got a track record of returning money to shareholders if we don't need it.”   Overnight   The Dow Jones Industrial Average is down to 16245.9. The Aussie dollar is down to US92.70 cents.

THE NEWS WRAP: Wesfarmers boss warns about talking down the economy

2:31PM | Wednesday, 19 February

Wesfarmers chief executive Richard Goyder has warned that negative chatter risked harming consumer confidence, in stark contrast to the good news coming from the World Economic Forum in Davos.   “In January I left Davos feeling really good about the world, having been there for a week and people were talking up the US economy, being pretty satisfied where Europe was and satisfied where the rest of the world was, and I've come back to Australia to incredibly pessimistic sentiment and I can't reconcile the two, to be frank,” Goyder says.   “I think consumer sentiment is still somewhat fragile and I think we all need to be careful that we don't inadvertently, or otherwise, talk it down when the bottom line is, I think, Australia is still very well placed economically.   “You have got superannuation funds that will be performing well, people's wealth increasing as housing prices move up, employment is still generally strong, interest rates are low and we all have to be careful we don't get ourselves into a downward spiral … it's not helpful.”   Abbott pushed for wage cuts at SPC Ardmona   The federal government pushed SPC Ardmona to slash employee wages by up to 40% in order to receive a bailout package, with some staff at the Shepparton plant seeing wages slashed by $20,000 to $30,000 a year, according to a Fairfax report.   While Industry Minister Ian Macfarlane did not directly address the claims, he did stress the importance of boosting productivity in reducing labour costs.   “I do want to reduce labour costs but it's not necessarily reducing wages,” Macfarlane says.   “If we boost our productivity, if we increase the number of units that a person produces, then wages can remain stable but we do have to have competitive working conditions and we do have to make sure that some of the things that have happened in industry in Australia in the past are addressed.”   Sensis slashing 800 jobs   Sensis has announced it is cutting 800 jobs, with 330 jobs to go in Victoria and 400 in NSW, as part of a restructuring plan, with half of the positions being sent to the Philippines.   “These changes are designed to support our growing digital business, respond to competition and deliver improvements in the service we provide to our customers,” Sensis managing director John Allan says.   “As a leader in digital marketing services and print directories serving Australian businesses, Sensis needs to remain responsive to the changing media landscape. While these decisions are difficult, they are necessary to ensure Sensis maintains its competitive position.”   Overnight   The Dow Jones Industrial Average is down to 16,066.3 points. The Aussie dollar is down to US90.02 cents.

THE NEWS WRAP: Federal government ministers warned to expect deep budget cuts

12:29PM | Monday, 16 December

Federal government ministers have been warned to expect deep budget cuts early next year, with deficits likely to surpass $120 billion over the next four years.   The Australian reports that spending growth is running at almost twice the rate claimed as early as May.   It says ministers have said that budget savings measures were being put off until the government’s razor gang could consider cuts proposed by its Commission of Audit.   Wesfarmers sells insurance underwriting business for $1.85 billion   Wesfarmers, the conglomerate that owns supermarket chain Coles, has sold off its insurance underwriting business to Insurance Australia Group for $1.85 billion.   The deal, if approved by competition regulators, will make IAG the largest insurance provider in Australia and New Zealand.   Wesfarmers chief executive Richard Goyder says exiting the insurance business will de-risk Wesfarmers’ portfolio of companies.   Toyota seeks to cut worker entitlements   Car maker Toyota is seeking to cut nearly 30 employee benefits at its Victorian plant to help pay for wage rises due next year.   Toyota has been prevented by the Federal Court from holding a vote of workers on the proposed changes.   The changes include cutting double-time-and-a-half pay on Sundays, extra payments for work considered “unusually dirty or offensive”, four-hour paid leave for employees who donate blood, and lowering the number of training days.   The company has warned it faces “unprecedented pressure” to continue to make cars in Australia following the decision of GM Holden to stop making cars locally by 2017.   The Dow Jones Industrial Average is up 0.8% at 15,886.46 points, while the Australian dollar is down at 89.5 US cents.

THE NEWS WRAP: RBA warns of non-mining investment slump

10:26PM | Thursday, 24 October

RBA deputy governor Philip Lowe is warning business investment outside the mining sector remains at its lowest levels since the 1990s recession, due to the lingering effects of the global financial crisis.   “While recently we have seen some return to risk-taking in financial markets, potential owners of real capital in the developed economies have not yet been prepared to step forward in significant numbers and take a risk,” Lowe says.   “Consumer demand has been soft and businesses have wanted to wait and to see what happens … this change in corporate attitudes is, I suspect, one of the enduring but underappreciated consequences of the financial crisis.”   Wesfarmers chief says post-election boost was a temporary blip   Wesfarmers chief executive Richard Goyder says sales in the retail sector remain sluggish, dashing hopes of a post-election bounce.   “In the last two to three weeks prior to the election there was some impact, probably in discretionary more than non-discretionary,” Goyder says.   “The week after the election was very strong for us, but it went back to normal pretty quickly.   “Australians continue to save, and there seems to be… a fair amount of cash sitting around, so hopefully people will bring their wallets out in the next couple of months.”   123 jobs squeezed out by Golden Circle   Golden Circle has announced it is closing its Mill Park factory, in Melbourne’s outer-northern suburbs, with 123 jobs set to go in March next year.   The company announced it will move its food production to an existing factory in Northgate, Queensland.   “This is in no way reflective of the performance of the Golden Circle team at Mill Park,” Golden Circle marketing general manager Simon Leonard says.   “The site is small and the capital investment required makes it too costly to continue to operate.”   Overnight   The Dow Jones Industrial Average is up 0.62% to 15509.21. The Aussie dollar is at US96.26 cents.

THE NEWS WRAP: Wesfarmers reports $2.26 billion profit, defends Coles fuel dockets

8:25PM | Thursday, 15 August

Coles’ parent company, Wesfarmers, has reported a full year profit of $2.26 billion for the year to June, with chief executive Richard Goyder defending fuel dockets in the face of an ACCC investigation.   Coles reported a 13.1% increase in earnings before interest and tax to $1.53 billion, with revenues up 4.8% to $35.78 billion.   Goyder also defends the use of shopper docket discounts on fuel in the face of criticism the practice harms smaller retailers.   “We try to give our customers what they want, and clearly they have a strong desire for these dockets at a time when they are under significant cost pressures in their daily lives,” Goyder says.   Packer hopes Japan will be the next jewel in the Crown   Crown executive chairman James Packer has expressed interest in bidding for a gaming licence in Japan if Japanese Prime Minister Shinzo Abe's Liberal Democratic Party goes ahead with granting licences for a Singapore-style casino resort.   “If Japan comes on it will be the second-biggest gaming market in the world. It has 100 million people who are all mad gamblers but they are all doing it through horse racing and pachinko. Japan is looking at the Singapore story," Packer says.   "Japan is two to three years before it all gets serious, which is perfect for us because we will have Macau Studio City open and the Philippines open.   "Crown Perth will be finished and Crown Sydney should be well underway, approvals pending. It is just going through the political process at the moment in Japan."   Dell reports 72% drop in quarterly earnings as PC sales crash   Dell has reported net income for the second quarter of $US204 million, down a massive 72% from $US732 million year-on-year.   “It was predictably bad. It's not a big surprise that margins compressed to the degree that they did, when they're prioritizing sales volume over profitability," Morningstar analyst Carr Lanphier told Reuters.   The news comes as founder Michael Dell battles prominent investor Carl Icahn over the company’s future, with Dell hoping to take the company he founded private.   Overnight   The Dow Jones Industrial Average is down 1.47% to 15112.2. The Aussie dollar is up to US91.41 cents.

THE NEWS WRAP: Wayne Swan admits “economy is losing momentum”

6:38PM | Wednesday, 5 June

Treasurer Wayne Swan has admitted the Australian economy appears to be losing momentum following the release of March quarter national accounts showing GDP growth slowed to 0.6% for the quarter, with businesses and households cutting spending.   “We've come through the worst economic conditions in over 80 years with an economy that is 14% larger than it was at the end of 2007 and with an unemployment rate with a five in front of it. That is an incredible achievement," Swan said.   “My overwhelming concern is that the economy is losing momentum; if not for the improvement in net exports the economy would be struggling quite significantly.”   Simplot enters talks to save Devonport food factory   Simplot Australia managing director Terry O’Brien has entered into talks with the Tasmanian government to help keep its Devonport vegetable processing plant viable, with Tasmanian Premier Lara Giddings not ruling out financial assistance.   “If we're going to continue in vegetables in Australia we've got to have a business that's sustainable in its own right. The only thing we'd consider, or we think would make some sense from government, is assistance with things relating to energy savings or water savings that could give us some real returns,” O’Brien said.   “We do not want to see Simplot close its doors, we want to see that company operating successfully here in Tasmania for the long term,” Giddings said.   Another blow to Geelong as Target looks to cut 200 jobs   Speculation is mounting that Wesfarmers-owned retail chain Target is looking to slash up to 200 back office jobs in Geelong as part of a bid to cut costs.   The shake-up comes after Wesfarmers chief executive Richard Goyder warned of weaker second-half earnings before interest and tax at the variety store chain would fall somewhere between an $8 million loss and $12 million profit.   “There have already been a number of team changes as part of this review and more changes are likely. However, we will work these through with the Target team and they will be kept informed of any changes that may arise,” a Target spokesperson said.   Overnight   The Dow Jones Industrial Average is down 1.4% to 14960.6. The Aussie dollar fell to a 20-month low of US95.11 cents.

THE NEWS WRAP: Gillard facing internal divisions over 457 visas

3:32AM | Friday, 15 March

Prime Minister Julia Gillard is facing increasing divisions within Caucus over 457 visas, including accusations of xenophobia from some of her MPs.

THE NEWS WRAP: Westfield to negotiate lease reductions

3:40AM | Friday, 15 March

Westfield joint chief executive Steven Lowy has told investors the global shopping centre giant would negotiate reductions of up to 5% on new leases, amid a weak retail market.

THE NEWS WRAP: Coles records 15th consecutive quarter of same-store sales growth

3:02AM | Friday, 15 March

Wesfarmers-owned retail giant Coles has recorded its 15th consecutive quarter of same-store sales growth, along with a 5% growth in second quarter sales to $7.71 billion.

THE NEWS WRAP: Australian manufacturing industry must embrace Asia, Federal Government taskforce says

8:14AM | Friday, 17 August

Australia can maintain a sustainable manufacturing industry into the future, but only if it embraces the opportunities provided by Asia, according to a Federal Government taskforce.

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